Session 2A presentation from the 7th Strategic Dialogue of the Carbon Market Platform, 4-5 October 2022

1. Partnership for Market
Implementation Facility
Dr. Venkata Ramana Putti
Strategic Dialogue of the Carbon Markets
Platform
Berlin - October 4-5, 2022

2. • Under Article 6 of PA, carbon pricing and markets has been identified as a key
mitigation mechanism to cost-effectively reduce carbon emissions. Over 100
countries included it in NDCs.
• In 2021, carbon pricing initiatives covered more than 23 percent of global
greenhouse gas emissions and generated $84 billion in revenue.
• Emerging trends show an increase in carbon pricing initiatives globally, as well as
increasing client demand for WBG’s technical support on carbon pricing and
markets.
• Countries are seeking an integrated perspective of how carbon pricing policies can
advance environmental, fiscal, sectoral, and technical expertise.
Growing Demand for Carbon Pricing Support

3. THEORY OF CHANGE
The guiding vision of the WB’s engagement is that
a strong price signal on carbon emissions will be
introduced across jurisdictions and sectors in the
medium to long term.
Implementation will result in opportunities for
creation of national and international carbon
markets, reducing mitigation costs and raising
climate ambition, helping mobilize climate finance,
making a significant and sustained contribution to
global decarbonization efforts.
In alignment with the WBG Climate Change Action
Plan (CCAP), the two-fold development objective is to
contribute to the acceleration of global
decarbonization efforts by:
• Assisting client countries design and deploy explicit
domestic carbon pricing policies appropriate to
their domestic context and compatible with their
sustainable development priorities; and
• Catalyzing the development of the next generation
of international carbon markets.
DEVELOPMENT OBJECTIVE
WB Engagement in Carbon Pricing and Markets

4. 5
Conceptualization Prototyping Products
Networked Carbon Markets
Climate Warehouse
Carbon Pricing Leadership Coalition
Analytical/Technical (State and Trends of Carbon Pricing, CP Dashboard)
Inovate4Climate,
Regional
Climate
Week,
Technical
Workshops,
e-Training
Partnership for Market Implementation
Pilot Auction Facility
ADVOCACY
INNOVATION
ADVISORY
(Implementation
& Scale Up)
KNOWLEDGE
• Develop approaches for supporting operationalization of Article 6.2
• Develop methods for consistent linkage of compliance and voluntary markets
• Pilot digital MRV and registry systems
• Design connected infrastructure for tracking credits
Integrated Approach to CB and TA

5. PMIF Coverage To Date

6. PMIF Funding
Our current donors
United Kingdom
Germany Norway
Sweden
Spain
Finland
Japan
Canada
Switzerland
Australia European Commission

7. • PMI, launched at COP25 Madrid, builds on a
decade of carbon pricing readiness experience
of PMR
• PMR supported 23 countries, built capacity of
20,000 technical professionals, and created a
vast body of knowledge, all of which acts as a
foundation for PMI.
• PMI has a capitalization goal of $250m over its
life (2021-30), launched with initial
capitalization of $100m
Partnership for Market Implementation
Readiness to Implementation…
Preparedness for
Implementation
Readiness building
blocks
Policy Analysis /
CPI decision-
making
Infrastructure
Development
(MRV,
Registries)
CP Instrument
Design & Piloting
Capacity
building

8. o Support participant countries/jurisdictions in implementation of carbon pricing
instruments needed for GHG mitigation and NDC implementation
o Develop knowledge base on carbon pricing instruments and facilitate information
exchange through technical discussions and knowledge dissemination
o Assist countries to identify and implement best practice approaches and, where relevant,
achieve compatibility in design to support the development and linking of international
carbon markets
o Encourage international and national cooperation, and inform the domestic and global
policy discussions on GHG mitigation by sharing lessons learned and providing a platform
for collective innovation on carbon pricing instruments
PMI Objectives

9. Carbon Pricing Implementation Support
Target: Countries with an
implementation timeline, demonstrated
political commitment or an existing
carbon pricing system in place
Support package: Strengthening
domestic implementation capacity,
strengthening legislative and policy
review functions, scaling and expanding
to new sectors
Scope of Work
Carbon Pricing Readiness Roadmaps
Target: New countries ready for the
decision to assess and potentially
implement a carbon pricing
instrument.
Support Package: Early stage activities
to determine which instrument to
adopt, build stakeholder support for
policy infrastructure, e.g. MRV
Targeted Technical Support
Target: Regional, subnational
jurisdictions, ad-hoc demands in
preparation for potential Window 1 or
2 support
Support Package: Harmonization of
carbon pricing infrastructure,
development of transparent
accounting procedures, etc.
Program Window 1 Program Window 2 Program Window 3

10. Implementation Countries
Country Focus area Proposal status
Chile • Roll out carbon offset mechanism
• Energy sector cap-and-trade program
• National strategy on Article 6
Submitted
China • Broaden and deepen ETS Under preparation
Colombia • Implement ETS Submitted
Indonesia • Cap-and-trade program in power sector
• Domestic crediting scheme
• CP instrument mix (carbon tax/ETS) in other sectors
Under preparation
Kazakhstan • Strengthen and expand ETS Approved
Mexico • Operationalize ETS Submitted
Turkey • Implement ETS Under preparation
Ukraine • Design and roll out plan for ETS Submitted
Vietnam • Implement a pilot crediting program
• Implement a pilot ETS in select sectors
Submitted

11. Country Focus area Proposal status
Bangladesh • Feasibility of and roadmap for CP options
• Participation in international carbon markets
Under preparation
Botswana • Readiness support for carbon tax Under preparation
Guinea • Assess feasibility of domestic CP options Submitted
Malaysia • Pilot carbon tax in selected sectors Approved
Montenegro • Feasibility of carbon pricing options
• Legislative framework to comply with EU legislation
Approved
Pakistan • Assess and prepare roadmap for ETS pilot program
• Participation in international carbon markets
Under preparation
Panama • Develop domestic carbon pricing infrastructure
• Pilot domestic voluntary carbon market
Approved
Senegal • Assess carbon pricing options
• Roadmap for implementation of carbon tax
• Participation in international carbon markets
Submitted
Readiness Countries

12. Sub-Saharan Africa
•SAPP and WAPP:
•Kick-off meetings organized in Southern and Western Africa.
•Discussions on organizing capacity building workshops over the next 10-12 months and identifying additional
areas of support needed.
•CAPP: Discussions held on regional capacity building activities and regional needs assessment.
•East Africa and West Africa Alliance: Initial meeting organized to brief the Alliances on PMI and explore
collaboration to deliver the capacity building program. Also exploring coordination with RCCs and other DPs.
Regional Track
•Ghana: Conducted a gap assessment of country’s readiness to participate in international carbon markets using
the MAAP-ITR tool. UNDP will provide TA on A6 including project approval/authorization process, enhancing
Article 6.2 Policy Framework, and capacity building for ministries over the next 14 months.
•Rwanda: Dialogue going on with government on the scope of needed support in coordination with Ci-Dev
Standardized Crediting Framework roll out
•Uganda: Coordinating with other development partners to deliver support; Government is reviewing the support
from all partners and will agree on next steps
National Track
Africa Regional Program

13. Brazil
• ToRs developed and are under review by Government to
support MRV activities in the energy sector
Peru
• Detailed scope of work being defined, around the national
registry and on capacity development for Art. 6 readiness
Ecuador
• Initial discussion held and scope of work currently under
definition around Art. 6 readiness support
Costa
Rica
• Initial discussion held and scope of work currently under
definition around Art. 6 readiness support
Latin America Regional Activity

14. Pacific Region
Dialogue with Pacific
states; Coordinate
with regional and
development
partners, assess
readiness needs using
tools such as MAAP
Workshops and
facilitated e-courses
building on the
knowledge base
developed under PMR
and PMIF’s Innovation
pillar
Inputs to piloting for
MRV to facilitate
development of
information systems
for decision-making
Domestic/regional
policy and institutional
framework for
participation in carbon
markets
Needs Assessment
Capacity Building Piloting
Policy support
Leverage the work by
partners such as ADB,
UNFCCC, and
coordinate with
bilaterals providing
regional support such
as Australia, Japan,
South Korea, New
Zealand, etc.)
Share experiences
and lessons from
other countries
through capacity
building workshops
Coordination
Knowledge sharing

15. Bosnia – Designing ETS
a) Options Paper: A qualitative assessment of the pros and
cons of different options plus a quantitative assessment
of the scope and coverage of the ETS.
b) Stakeholder consultations: At least three stakeholder
workshops conducted to receive input and feedback on
the design options.
c) Recommendations on ETS design: Based on the analysis
and stakeholder consultations, the WB team will work
with the Government to identify the preferred design
options.

16. Technical Work Program
Knowledge
In Progress
• Carbon pricing in power sector (with EEX, IEA and ICAP)
• Political economy of carbon pricing (with FO)
• State & Trends of Carbon Pricing (2023)
Outreach
• Technical workshops topics tbd
• Carbon credits for NDC targets vs. international
markets
• Capacity building for Article 6
• Carbon border adjustment mechanisms
Complements the country programs with technical support on carbon pricing and markets issues
FY22 Technical Workshops
• Implementing Carbon Pricing Instruments
• Just Transition

17. Key Learnings from PMR/PMI
Programs Process
 A clear political mandate, together with inter and
intra-ministerial coordination is key for successful
implementation.
 Should be part of a broader policy framework,
and not done in isolation
 Institutional arrangements should be clearly
defined as early as possible to minimize risks.
 Stakeholder engagement is critical for confidence
building, data collection, and design and
implementation.
 Extensive international exchanges and peer-to-
peer learning can be a catalyst for successful CPI
design.
 There is need to clearly communicate the benefits
- use of revenues, improvements in productivity
and technological changes.
 Right selection of counterpart agency and target
activities is the key contributing factor to the
achievement of project outcomes.
 A built-in mechanism for regular sharing of
experience and progress across components should
be instituted.
 Technical knowledge sharing can complement and
supplement successful project implementation.
 Cross-sectoral cooperation enhances capacity of the
implementing agencies. This is particularly key as
countries adopt a whole-of-government approach
towards decarbonization.
 Proactive engagement needed to maximize program
contribution, not just on carbon markets and pricing,
but also broader climate policies (NDC) and
developmental programs (e.g. WB’s DPF operations)